Remember The Debt Ceiling Debate? It’s Back

by: May 23, 2012

A storm is brewing in Washington that could darken political debate for months to come. It’s about the debt, the deficit, taxes and spending — all hot topics lawmakers have been fighting about for years now.

This time, though, there’s a deadline, and the consequences of inaction would be immediate. That has many in Washington saying: Here we go again.

In the past week, President Obama and House Speaker John Boehner have begun a new round of sparring over the U.S. debt ceiling.

That’s the limit on the country’s line of credit — a limit that lawmakers have set and raised dozens of times over the years, as the federal government has spent more than it has taken in.

When Boehner and the GOP took the House majority at the beginning of 2011, the speaker laid down a new principle: Republicans would not pass an increase in the debt limit unless an equal amount was cut from the budget. And, they said, they would not consider tax increases on the wealthy as a way to fix the deficit.

The partisan fighting that followed was among the most acrimonious, bitter and biting debate many in Washington can remember.

Now, fast forward to last week, and a speech Boehner gave to the Peterson Foundation’s 2012 Fiscal Summit.

“In my view, the debt limit exists precisely so that government is forced to address its fiscal issues,” Boehner said.

Boehner, an Ohio Republican, told the hundreds of economists, policy experts and political operatives present that he is sticking to those principles — and, furthermore, he will demand a vote on the debt ceiling before this fall’s elections.

The Coming Storm

Last summer’s debate was a doozy. But in many ways, the approaching crisis is much worse. Lawmakers have passed so many temporary bills in recent years that an almost unbelievable number of issues come to a head all on the same day: Jan. 1, 2013.

If Washington doesn’t act by that day, tax rates will shoot up for everyone. Huge, indiscriminate cuts in military and domestic programs will take place. And, shortly after that, the nation will again hit the debt ceiling, putting into doubt whether the government can pay its bills.

In his fiscal policy speech, Boehner said: “Previous Congresses have encountered lesser precipices with lower stakes and made a beeline for the closest lame-duck escape hatch. Let me put your mind at ease. This Congress will not follow that path, if I have anything to do with it.”

The response from the Obama administration? “We’re not going to recreate the debt ceiling debacle of last August,” White House spokesman Jay Carney said. “It is simply not acceptable to hold the American and global economy hostage to one party’s political ideology.”

‘A Pretty Disparate Caucus’

Perhaps the biggest sticking point in last summer’s negotiations was a split among House Republicans themselves. Dozens of them had been elected only months before, many promising to carry their strict conservative principles to Washington. Compromise was not their plan. And even when the speaker and the president came close to a broadly applauded deal, a critical number of Republicans refused to vote for it.

On ABC on Sunday, Boehner acknowledged this friction still exists in his party.

“You know, I’ve never been shy about leading,” he said. “But leaders need followers. And we’ve got 89 brand-new members, we’ve got a pretty disparate caucus, and it’s hard to keep 218 frogs in a wheelbarrow long enough to get a bill passed.”

Boehner said it’s not a bad thing that House Republicans want him to go further.

“I want to do more, too. But Republicans are still a minority here in Washington,” he said. “Democrats control the Senate, we’ve got a Democrat in the White House, and our members are pretty frustrated.”

And this may be the real point here. Rather than having to compromise on a spending, taxes and a debt deal going forward, Boehner and House Republicans would like to find a way to get their principles enshrined in law. And the only way to do that is to change the political makeup of the government itself.

So while they will talk about this issue a lot in the coming months, real solutions aren’t likely to come before Election Day.